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Tuesday, December 30, 2014

KDA v. Sazerac – Who Gets To Be On The “Kentucky Bourbon Trail®” Or Public Television?

As more and more people become interested
in Bourbon and want to experience the living histories of Kentucky’s Bourbon
distilleries, they might visit the “Kentucky Bourbon Trail” website (link here) to plan their visit.

In the course of planning their
trip along the Kentucky Bourbon Trail, they might wonder why Buffalo Trace,
with all of its venerable history, isn’t included on the Trail or the map:

The answer is as simple as
understanding that members can benefit from participating in a trade
organization. The Kentucky Distillers’
Association (“KDA”) is a trade organization made up of member distilleries, which
traces its roots back to 1880 when distillers banded together to reduce whiskey
taxes and to protect the industry. The
group disbanded during Prohibition, but reformed in 1935 to assist with repeal
efforts. According to its website, the
KDA is a non-profit organization with a mission “to protect the trade interests
of the industry whenever they may be threatened and to handle common problems
in a concerted action.”

The KDA created the Kentucky
Bourbon Trail in 1999, at a time when the owner of Buffalo Trace, Sazerac
Company, Inc., was a member of the KDA.
Anyone who toured Buffalo Trace between 1999 and 2009 might have noticed
Kentucky Bourbon Trail trademarked logos and advertisements, and might have
even had their Kentucky Bourbon Trail “passport” stamped at Buffalo Trace to
memorialize their visit.

This all changed at the end of
2009, however, when Sazerac terminated its membership in the KDA (Click
here to view the December 31, 2009 letter) and then, according to a
complaint filed by the KDA against Sazerac in April 2010 in federal court in
Louisville, it tried to keep using the Kentucky Bourbon Trail trademarks (Click
here to view the Complaint).

Trademark protection has been a recurrent
theme in Bourbon litigation, and is a frequent subject of my posts. While many of those cases arose very early in
the development of trademark rights, it’s probably indisputable that trademark
rights are well-understood by today’s sophisticated corporations, Sazerac
included. Worse for Sazerac, according
to court filings, as a KDA member, “Sazerac participated in the creation and
development of the KDA’s promotion and tourist attraction, the KENTUCKY BOURBON
TRAIL®, including the creation and adoption of the mark ‘KENTUCKY BOURBON TRAIL®.’” Buffalo Trace was even one of the first
members of the KDA’s promotion and tourist attraction.

Between 1999 and 2009, when Buffalo
Trace used the KDA’s trademark for the Kentucky Bourbon Trail on its website,
it used the standard acknowledgment that the KDA owned the trademarks. But then, after Sazerac left the KDA, it kept
using the Bourbon Trail name albeit slightly revised to “Buffalo Trace
Distillery on the Bourbon Trail,” it tried to register that as a trademark
(along with a similar trademark for its Tom Moore Distillery), and it even tried to cancel the KDA’s
trademarks.

The case never went to trial, and
instead the parties settled, so the case was dismissed in November 2011. While the terms of the settlement were not
released (the Order that the parties prepared for the Court stated simply that all
claims have “been resolved and settled to the mutual satisfaction of the
parties” – Click here to view),
a review of today’s Buffalo Trace website can give us a hint about the
result: neither the “Kentucky Bourbon
Trail” nor “Buffalo Trace Distillery on the Bourbon Trail” are anywhere to be
seen.

If there were any smoldering embers
of the dispute between the KDA and Sazerac, they might have been fanned last
week when a prominent whiskey writer complained about the new Bourbon documentary
which aired on Kentucky Educational Television (“KET”) earlier this month. The documentary, “Kentucky Bourbon Tales; Distilling
the Family Business,” aired to much acclaim. For those who missed it or are outside of
Kentucky, you can find it at this link: Kentucky
Bourbon Tales.

Kentucky Bourbon Tales was produced
by the Louie B. Nunn Center for Oral History and was funded by the KDA. I’ve linked to the Louie B. Nunn Center
interviews for other posts, including great information related to Buffalo Trace.

As the subtitle “Distilling the
Family Business” indicates, the focus of the documentary is people who grew up
distilling and handed down Bourbon tradition generation after generation. The Beam family (stretched far wider than
Beam Suntory), Wild Turkey with Jimmy and Eddie Russell, Heaven Hill (still a privately-owned
company), Brown-Forman, Four Roses with nearly 50 years of Jim Rutledge working
his way through Seagram’s and finally bringing the brand back to prominence,
were all featured.

Buffalo Trace – which I’ve written
about extensively and which I’m personally a big fan of – wasn’t mentioned, nor
were two other distilleries owned by Sazerac.
Maybe that was because those distilleries did not fit into the “Distilling
the Family Business” framework due to their changes in ownership and lack of
family lineage for Master Distillers.
But, of course, since Sazerac voluntarily decided to abandon the KDA, it’s
reasonable to conclude that’s why the
Sazerac distilleries were not included in a KDA-sponsored production. Is there a problem with that?

I didn’t think there was anything
wrong with excluding a non-member who didn’t pay any dues that would have
supported the documentary, so I was surprised to read criticism that the
documentary hid an “ugly secret” of a “petty commercial dispute,” and even more
surprised to read the claim that the KDA was “lying,” and the pronouncement that
KET and the University of Kentucky “should be ashamed of themselves for their complicity
in this charade.” So far as I know,
Sazerac has not complained about the KET documentary; it’s just coming from one
writer.

Sazerac itself probably hasn’t
complained because there’s no “secret” (let alone an “ugly” one) about the membership
of the KDA, and trademark infringement is no “petty” matter. I’m not sure that anyone really thinks that Sazerac
should have been given the benefit of a production financed by the group that
it spurned, and from which, according to the court documents, it tried to
appropriate the Bourbon Trail trademark. Personally, I’m glad that we’re not going down
the road of socialized television. Sazerac is thriving and is happy to take care of its own marketing, and the KDA is doing a great job
for its members. Let’s just all enjoy
our Bourbon in harmony for the New Year, and not root for a Round Two of the KDA v. Sazerac lawsuit.

2 comments:

I haven't had the chance to watch the documentary yet so my comment may be a little off base, but I can imagine a reasonable middle ground between a "petty commercial dispute" and "socialized television" that serves the public interest of education. Chuck's comments about complicity are extreme, but the point that KET is a public station is what's most important. To many like ourselves, the history of the industry is relatively known or at least accessible (and ridden with disputes such as this as you mention), but a documentary published via KET with such grand omission is akin to a farce if viewed from a purely educational angle. If I'm looking to educate myself (which is the general point of public TV programming) I want the entire survey, not something constrained by funding because it was based on the interests of commercial enterprise--even if those funds originate through a non-profit. Of course, this is all wishful thinking. I suppose I should go watch the film now. Thanks for this post.

Thanks for the insightful comment. Absent a grant for public programming where content is controlled solely by KET, I don't know that any educational programming funded by a for-profit or non-profit organization is going to be immune from criticism for omissions or slant (that happens with grants too). Buffalo Trace is undeniably a HUGE piece of the Bourbon story, and I've enjoyed learning about it, but in the end if I get to judge, the KDA shouldn't have to include non-members. As in many cases, maybe full disclosure is the key.